In the latest close session, Starbucks (SBUX) was up +2.11% at $97.22. The stock lagged the S&P 500's daily gain of 2.51%. Meanwhile, the Dow gained 2.85%, and the Nasdaq, a tech-heavy index, added 2.8%.
Prior to today's trading, shares of the coffee chain had lost 5.52% lagged the Retail-Wholesale sector's loss of 4.13% and the S&P 500's loss of 1.66%.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. On that day, Starbucks is projected to report earnings of $0.42 per share, which would represent year-over-year growth of 2.44%. Simultaneously, our latest consensus estimate expects the revenue to be $9.1 billion, showing a 3.87% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.31 per share and revenue of $38.37 billion, which would represent changes of +8.45% and +3.18%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Starbucks. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Starbucks presently features a Zacks Rank of #4 (Sell).
From a valuation perspective, Starbucks is currently exchanging hands at a Forward P/E ratio of 41.3. This expresses a premium compared to the average Forward P/E of 18.9 of its industry.
It's also important to note that SBUX currently trades at a PEG ratio of 2.12. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 1.84.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 192, this industry ranks in the bottom 22% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Starbucks Corporation (SBUX): Free Stock Analysis Report
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